Congress spars over military health-care hikes

How much of an increase source of ongoing debate among federal lawmakers as government braces for sharp hikes in delivering care

At Naval Medical Center San Diego, retired Marine Larry Thomas, with son Joshua Thomas, 14 months, and stepdaughter Khyra White, 5, waits to meet with a Tricare representative on an insurance issue. Proposed rate hikes in coverage have become a hot topic in Congress.
— John Gastaldo

At Naval Medical Center San Diego, retired Marine Larry Thomas, with son Joshua Thomas, 14 months, and stepdaughter Khyra White, 5, waits to meet with a Tricare representative on an insurance issue. Proposed rate hikes in coverage have become a hot topic in Congress.
— John Gastaldo

Military retirees, active-duty service members and others who rely on the government’s Tricare health-care benefit could be looking at higher fees over the next several years, but just how much higher is the source of ongoing debate in Washington.

The Defense Department has proposed to nearly quadruple the rate many working-age military retirees will pay in annual family enrollment fees over the next five years to help comply with new deficit-reduction requirements. The Budget Control Act of 2011 calls for the Defense Department to cut $487 billion over the next 10 years.

However, the House Armed Services Committee rejected the Pentagon’s Tricare plan Wednesday, even though a prominent Republican senator has publicly called the benefit unsustainable.

Secretary of Defense Leon Panetta has said the fee increases in the proposed fiscal 2013 defense budget are necessary for national security, because without them the military would have to find other areas to trim, possibly by reducing troop strength.

Retired military and veterans groups disagree with Panetta’s assessment and accuse the government of trying to renegotiate a contract after the fact.

“To say the defense of this country falls upon the shoulders of these retirees, who have delivered, that’s nonsense,” said retired Marine Corps Lt. Gen. Jack Klimp, president and chief executive of the 50,000-member National Association for Uniformed Services.

The Military Health System has 9.6 million eligible beneficiaries, which include active-duty service members and their families, military retirees and their families, dependent survivors and other eligible reserve component members and their families. Many fees have not been raised in 15 years, and the percentage of out-of-pocket costs that many Tricare beneficiaries pay for their health care has plummeted during that period, according to Defense Department spokeswoman Cynthia Smith.

In 1996, retired Tricare beneficiaries bore 27 percent of their overall health-care costs. That dropped to about 10 percent in 2012, Smith said.

Smith said that at the end of the phase-in period, under the administration’s plan, beneficiary out-of-pocket costs would rise to less than 15 percent of total health-care costs, still far less as a percentage than in 1996.

“It means we can continue to increase investments in patient care, such as building exceptional new medical facilities, improving access to care and providing preventive services at no cost to our beneficiaries,” Smith said in a statement.

Tricare benefits also tend to be significantly less expensive than health insurance for civilians. On average, civilians who have health insurance through their employers pay almost eight times more, according to a 2011 Employer Health Benefits Survey conducted by the Kaiser Family Foundation/Health Research & Educational Trust.

About 150 million nonelderly Americans get their health insurance through an employer-sponsored plan.

Today, military retirees at all income levels pay $520 a year for their health-insurance premiums. Under the president’s plan, those making $45,179 and above would see their rates increased to $2,048 by fiscal 2017. Those making between $22,590 and $45,178 would have their rates go up to $1,523, and retirees earning less than $22,589 would eventually pay $893 annually.